Cross-border ecommerce refers to ecommerce businesses that target customers outside of Japan. In recent years, cross-border ecommerce has been attracting attention in Japan thanks to its potential to help businesses expand globally.

For businesses in Japan that are considering selling their products overseas, cross-border ecommerce can be a good choice. When a business wants to expand to other countries via cross-border ecommerce, the first thing it needs to do is understand the size of the global ecommerce market.

In this article, we’ll look at the size of the cross-border ecommerce market, both in Japan and worldwide, and discuss ecommerce trends specifically in Japan, China, and the United States. Lastly, we’ll look at the reasons for the growth in market size and forecasts for the future size of the market.

What’s in this article?

• Ecommerce market share by country
  
• How big is cross-border ecommerce in Japan, China, and the United States?
  
• Why is cross-border ecommerce growing?
  
• What is the future of cross-border ecommerce?
  
• Cross-border ecommerce in Japan
  

Ecommerce market share by country

According to a 2024 ecommerce market report released by the Ministry of Economy, Trade, and Industry (METI), the top 10 countries ranked by ecommerce market share in 2023 were:

1. China (51.3%)
   
2. United States (19.5%)
   
3. United Kingdom (3.6%)
   
4. Japan (3.4%)
   
5. South Korea (2.1%)
   
6. India (1.7%)
   
7. Germany (1.6%)
   
8. Canada and France (tie 1.4％)
   
9. Other (2.1%)
   
10. Russia (1.3%)
    

China and the United States alone accounted for more than 70% of the global ecommerce market. China, in particular, made up the majority of the total market, and was vastly more active than other countries, including Japan. For business owners considering entering the cross-border ecommerce market, it is therefore important to understand the size and impact of both the China and the US.

How big is cross-border ecommerce in Japan, China, and the United States?

Now that we know the ecommerce market shares in the US and China, let’s look at these figures relative to Japan’s market size.

The following points are noteworthy about Japan, the United States, and China’s cross-border ecommerce:

• The amount of money spent by customers in Japan on purchases from the US and China is relatively low at ¥376.8 billion and ¥44.0 billion, respectively.

• The amount of money spent by customers in the US and China on purchases from Japan is extremely high at about ¥1.5 trillion and ¥2.4 trillion, respectively.

In other words, while Japan is a major seller to the US and China, it spends relatively little on ecommerce purchases from those countries. Further, the amount of money spent by customers in China on ecommerce purchases from Japan exceeds ¥2 trillion. China therefore has a clear influence on Japan’s cross-border ecommerce.

The reasons people in Japan do not often use cross-border ecommerce sites include:

• Experiencing language barriers
  
• Having concerns about site security
  
• Being satisfied with the services and quality of domestic ecommerce sites
  

Why is cross-border ecommerce growing?

Let’s look at the factors driving the expansion of the cross-border ecommerce market.

The spread of information via social media and the internet

With recent improvements in communication technology and electronic devices, more and more people are using the internet. Smartphones, in particular, have become more accessible than ever before, and the use of social media on phones and tablets is increasing. Subsequent online advertising has made it possible for people all over the world to learn about products from different countries.

The ability to reach overseas customers has made it easier for businesses to attract their interest, which has resulted in an increase in demand for cross-border ecommerce. This rise in demand is a key factor in the expansion of the market.

COVID-19 restrictions

During the COVID-19 pandemic, many people in Japan started shopping on cross-border ecommerce sites because they were unable to leave the house and were spending more time indoors. As a result, even those who traditionally only shopped in physical stores began to embrace online shopping. The convenience of being able to purchase overseas products from home led to a surge in demand for cross-border ecommerce.

Even after the pandemic, interest in buying products unavailable in Japan remains strong. As a result, the global cross-border ecommerce market continues to grow and shows no signs of decline.

An example of a popular cross-border ecommerce purchase made by customers in Japan is dietary supplements and health foods from the United States, a leading producer of supplements. In some cases, it is cheaper to buy dietary supplements through US-based cross-border ecommerce sites than to purchase them locally in Japan or from ecommerce platforms in Japan. This has caught the attention of health-conscious customers in Japan, especially those focused on improving their health and boosting their immunity in the wake of the pandemic.

Reduced expenses due to overseas business development

When selling products from Japan to customers overseas, it’s certainly possible for a business to open a physical store in the target country (i.e., the country the business is selling to). However, this approach comes with costs such as rent and salaries for local staff. In contrast, cross-border ecommerce operates online, which allows a business to eliminate the expenses associated with a physical store. This makes it much easier for businesses to expand internationally. The ability to significantly reduce costs is another key factor driving the rapid growth of the cross-border ecommerce market.

What is the future of cross-border ecommerce?

According to data collected by market research organization Facts & Factors and included in METI’s report, the global cross-border ecommerce market is expected to reach $7.938 trillion USD by 2030. The estimated compound annual growth rate (CAGR) is around 26.2%, indicating that the cross-border ecommerce market will continue to grow in the coming years.

This forecast represents a tenfold increase compared to the 2021 market value of $785 billion. The predicted acceleration in growth is largely attributed to the widespread use of the internet and social media, as mentioned previously.

Cross-border ecommerce in Japan

In recent years, various types of products from Japan—including cosmetics, food, and items from subcultures such as anime and gaming—have gained popularity worldwide. Additionally, the recent depreciation of the Japanese yen has sparked growing interest in products from Japan among overseas customers, much like the increased demand for tourism to Japan. This presents a great opportunity for Japanese businesses to enter the cross-border ecommerce market.

By focusing on polite, attentive service and offering high-quality, unique products and services that embody Japan’s brand, there is significant potential for businesses to grow and increase sales. However, to fully leverage the potential of cross-border ecommerce, it is important to conduct thorough market research on any target countries and understand the needs of customers in those markets. Businesses must be particularly knowledgeable about cross-border ecommerce to China and the US, and aim to provide quality services to these destinations.

Additionally, it is important to have a solid understanding of cross-border ecommerce business models, mechanisms, local laws, and regulations. Ensuring that the proper logistics routes and payment systems are in place is key. Above all, providing a secure and reliable shopping experience for overseas customers can increase purchasing motivation and trust in a service. Therefore, it’s important to prepare carefully for cross-border ecommerce, particularly with regard to the payment environment, and work toward successful cross-border ecommerce operations.

Stripe provides a wide range of tools to support the efficient operation of payment services, including information processing, revenue management, and the introduction of multiple payment methods, such as credit cards. For example, Stripe Checkout supports more than 30 languages and more than 135 currency types, and can be used to optimize and simplify the payment pages of cross-border ecommerce sites. Stripe also makes it possible to provide customers with a smooth and pleasant payment experience, which in turn can lead to an increase in purchase completion rate.